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State-run Oil and Natural Gas Corporation of India Ltd’s subsidiary, ONGC Videsh Ltd (OVL), will acquire 2.72 per cent participating interest in Hess Corporation’s three oil and gas fields in the Azerbaijan sector of the Capsian Sea, ACG, along with 2.36 per cent interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline for $1 billion (Rs 5,500 crore), the company informed stock exchanges.

The company has signed definitive agreement to acquire this interest in the Azeri, Chirag and the Deep Water Portion of Guneshli Fields in the Azerbaijan sector and BTC and is awaiting regulatory nod, the release said. The acquisition is subject to government approval and the deal is expected to close by the first quarter of 2013.

“The acquisition is consistent with ONGC’s stated strategic objective of adding high quality international assets to its existing E&P portfolio. The acquisition would bring 9 per cent additional proved reserves to OVL portfolio and also bears significant strategic importance to India in terms of contributing towards India’s energy security,” the release said.

With an average daily production of around 700,000 barrels of oil per day (bopd) of crude oil, ACG, located in the south Caspian Sea off the coast of Azerbaijan, is one of the largest producing oil fields in the world. British Petroleum operates ACG and is partnered by State Oil Company of Azerbaijan Republic (SOCAR), Chevron, Statoil, ExxonMobil, Inpex, Turkish NOC – TPAO and Itochu.

The 1,768-km BTC Pipeline is one of the main export routes for Caspian crude oil production with a capacity of around 1 million bopd to the Ceyhan terminal in the Mediterranean Sea in south east Turkey.

As per the Perspective Plan – 2030 of ONGC, the oil and gas production of OVL would increase from the current level of 8.75 million tones oil equivalent (MMTOE) to 20 MMTOE by FY’18 and 60 MMTOE by FY’30.

Sudhir Vasudeva, CMD, ONGC said, “The production from this asset during financial year 2011-12 was about 15 per cent of OVL’s crude oil production during the same period.”